THERAPEUTIC ANTIBODIES INC /DE, PRE 14A, 1998-03-20

THERAPEUTIC ANTIBODIES INC /DE
PRE 14A, 1998-03-20
MEDICAL LABORATORIES

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by Registrant [X]
Filed by a Party other than
the Registrant [ ]

Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

THERAPEUTIC ANTIBODIES INC.
(Name of Registrant as Specified in Charter)

----------------------------------------------------------------------------
(Name of Person(s) Filing the Proxy Statement, if other than the Registrant)

Payment of Filing Fee (check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1)
and 0-11.

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.

<PAGE> 2

THERAPEUTIC ANTIBODIES INC.
1207 17TH AVENUE SOUTH
SUITE 103
NASHVILLE, TN 37212

THIS DOCUMENT IS IMPORTANT AND NEEDS YOUR IMMEDIATE ATTENTION. WHEN CONSIDERING
WHAT ACTS TO TAKE YOU ARE RECOMMENDED TO CONTACT YOUR STOCKBROKER, BANK MANAGER,
SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT INVESTMENT ADVISER. YOUR ATTENTION IS
DRAWN TO THE RESOLUTION TO APPROVE AND AUTHORIZE THE COMPANY TO FILE THE
CERTIFICATE OF AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION, THE PRINCIPAL TERMS OF WHICH ARE DESCRIBED IN THE PROXY
STATEMENT.

April 1, 1998

TO THE SHAREHOLDERS OF THERAPEUTIC ANTIBODIES INC.:

On behalf of the Board of Directors and management, I invite
you to attend the Annual Meeting of Shareholders of Therapeutic Antibodies Inc.
(the "Company") to be held on April 27, 1998 at 5:30 p.m., Central Time, at the
University Club of Nashville, located at 2402 Garland Avenue, Nashville,
Tennessee 37212.

The notice of meeting and proxy statement accompanying this
letter describe the specific business to be acted upon.

In addition to the specific matters to be acted upon, there
will be a report on the progress of the Company and an opportunity for questions
of general interest to the shareholders.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON, YOU ARE REQUESTED TO MARK,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.

If you have transferred all your Therapeutic Antibodies Inc.
Common Stock, please deliver this document to the purchaser or transferee or to
the agent through whom the sale of shares was executed, for delivery to the
purchaser or transferee.

Sincerely yours,

Martin S. Brown
Chairman of the Board

IMPORTANT

COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY.

<PAGE> 3

THERAPEUTIC ANTIBODIES INC.
1207 17TH AVENUE SOUTH
SUITE 103
NASHVILLE, TN 37212

NOTICE OF ANNUAL SHAREHOLDERS' MEETING
APRIL 27, 1998

Notice is hereby given that the Annual Meeting of Shareholders
of Therapeutic Antibodies Inc. (the "Company") will be held on April 27, 1998,
at 5:30 p.m., Central Time, at the University Club of Nashville, located at 2402
Garland Avenue, Nashville, Tennessee 37212, for the following purposes:

AS ORDINARY BUSINESS:

1. To elect ten (10) directors;

2. To receive and adopt the Annual Report to
Shareholders and audited financial statements
for the fiscal year ended December 31, 1997;

3. To ratify the appointment of the accounting
firm of Coopers & Lybrand L.L.P. as
independent auditors of the Company and its
subsidiaries for the Company's 1998 fiscal
year and to authorize the directors to fix their
remuneration; and

4. To transact such other business as may properly
come before the meeting or any adjournment
thereof.

AS SPECIAL BUSINESS:

To consider and, if acceptable, to pass the following
resolution which will be proposed as an Ordinary Resolution:

1. To approve and authorize the Company to file the
Certificate of Amendment to the Company's Amended
and Restated Certificate of Incorporation, the
principal terms of which are described in the
Proxy Statement.

Shareholders of record at the close of business on March 13,
1998 are entitled to notice of and to vote at the Annual Shareholders' Meeting.

Dated: April 1, 1998 By order of the Board of Directors

Harry G. Browne, M.D.
Secretary

IMPORTANT

WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENVELOPE
PROVIDED.

<PAGE> 4

THERAPEUTIC ANTIBODIES INC.
PROXY STATEMENT

INFORMATION CONCERNING THE SOLICITATION

This statement is furnished in connection with the
solicitation of proxies to be used at the Annual Meeting of Shareholders of
Therapeutic Antibodies Inc. ("TAb" or the "Company") to be held on April 27,
1998 at 5:30 p.m., Central Time, at the University Club of Nashville, located at
2402 Garland Avenue, Nashville, Tennessee 37212, and at any adjournment or
adjournments thereof. This Proxy Statement and the accompanying form of proxy
are first being mailed or given to shareholders of the Company on or about April
1, 1998.

Shareholders are urged to sign the enclosed form of proxy and
return it promptly in the envelope enclosed for that purpose. Proxies will be
voted in accordance with the shareholders' directions. If no directions are
given, proxies will exercise their discretion as to whether, and if so, how they
vote on all matters to properly come before the meeting. The Board of Directors
is not aware of any matters other than those described herein which may be
presented for action at the meeting. If any other matters properly come before
the Annual Meeting, it is intended that the proxies will be voted with respect
thereto in accordance with the judgment of the person or persons voting such
proxies subject to the direction of the Board of Directors.

A proxy may be revoked at any time prior to the voting thereof
by written request to the Company at 1207 17th Avenue South, Suite 103,
Nashville, TN 37212, Attention: Harry G. Browne, M.D., Secretary. A proxy may
also be revoked by submission to the Company of a more recently dated proxy. The
giving of a proxy will not affect the right of the shareholders to attend the
meeting and vote in person. A shareholder may revoke a proxy by attending the
Annual Meeting and voting in person.

The close of business on March 13, 1998 has been fixed as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting. On that date there were 23,252,825 shares of Common
Stock outstanding. Each share has one vote. The Common Stock of the Company is
the only outstanding voting stock.

<PAGE> 5

ELECTION OF DIRECTORS

The Company's Bylaws provide that the Board of Directors shall
consist of such number of directors as may be fixed by action of the Board of
Directors, but not less than three nor more than fifteen. The directors have
determined that the Board of Directors shall consist of eleven (11) members. The
Board of Directors has nominated the ten (10) individuals named below as
nominees for election as directors to serve until the 1999 Annual Meeting or
until their successors shall be elected and shall qualify. All of the nominees
are members of the current Board of Directors. If any nominee or nominees should
be unable to accept nomination or election as a director, which is not expected,
the proxies may be voted with discretionary authority for a substitute or
substitutes designated by the Board of Directors. Directors are elected by a
plurality of the votes cast by the shares entitled to vote at a meeting at which
a quorum is present. The Bylaws of the Company do not permit shareholders to
cumulate their votes in the election of directors. As a result, each shareholder
may cast one vote per share for each nominee. There is currently one vacancy on
the Board of Directors of the Company. Pursuant to the Company's Bylaws, the
Board of Directors has the authority to fill any vacancy occurring on the Board
of Directors and the Board is currently engaged in a search for a suitable
candidate to fill the vacancy. Accordingly, the shareholders of the Company will
not be permitted to nominate or vote for a candidate to fill the current vacancy
at the Annual Meeting.

NOMINEES

The following table shows the names, ages and principal
occupations of the nominees to become directors and the year in which each
nominee was first elected to the Board of Directors.

Name Age Principal Occupation Director Since
- ---- --- -------------------- --------------
<S> <C> <C> <C>
Martin S. Brown 59 Chairman of the Board 1987

Andrew J. Heath, M.D. 49 Vice Chairman of the Board, Chief 1998
Executive Officer

Harry G. Browne, M.D. 68 Vice Chairman of the Board, Secretary 1984

A. J. Kazimi 40 President and Chief Operating Officer 1994

John Landon, M.D. 67 Executive Vice President - Research and 1984
Development

Tim Chard, M.D. 60 Senior Vice President - Research and 1984
Development Administration

Thomas G. Andrews 64 Chairman and Chief Executive Officer of 1985
Andrews and Associates, Inc. and Director
of Andrews & Bohman, Inc.

Robert C. Hilton 60 Founder, Chairman, Chief Executive Officer 1989
and President of Home Technology
Healthcare, Inc.

Steven L. Stroup, M.D. 59 Director of Radiation Oncology, 1985
Centennial Medical Center, Nashville,
Tennessee

Joseph D. Williams 71 Director of J.C. Penney Company, Eckerd 1992
Corporation and Rockefeller Financial
Services, Inc.
</TABLE>

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
THE ELECTION OF THE NOMINEES.

<PAGE> 6

MARTIN S. BROWN, Chairman of the Board. Mr. Brown joined Jack
Daniel Distillery Lem Motlow Prop, Inc., as Vice-President in 1965, and was
elected President in 1973 and became chief executive in 1977. In 1983, he was
elected Vice-Chairman of the parent company of Jack Daniel Distillery,
Brown-Forman Corporation, a $1.6 billion (annual revenues) consumer goods
company in which capacity he served until 1986. Mr. Brown is a Director of Micro
Craft, a privately held corporation. Mr. Brown has served as Chairman of the
Board of TAb since joining the Company in 1987, and served as Chief Executive
Officer from 1987 to March 1998.

ANDREW J. HEATH, M.D., Vice Chairman of the Board and Chief
Executive Officer. Dr. Heath holds a science degree in pharmacology from the
University of London and an M.D. from Sweden's Gothenberg University. He has
considerable experience in the pharmaceutical industry with Glaxo Inc. and
Astra. Until 1996, he was responsible for more than 500 sales and marketing
professionals for Astra U.S. as Vice President Marketing and Sales. In that
post, he had profit and loss responsibility for Astra U.S.'s pharmaceutical
portfolio. He served as Chief Executive Officer at AeroGen, Inc., a privately
held drug delivery company, from 1996 until 1998. Dr. Heath joined the Company
as a Director, Vice Chairman of the Board and Chief Executive Officer in March
1998.

HARRY G. BROWNE, M.D., Vice Chairman of the Board and
Secretary. Dr. Browne was a founder of International Clinical Laboratories,
Inc., a $250 million (annual revenues) company involved in the provision of
medical laboratory testing services, where he served as Chief Executive Officer
from 1970 to 1977, Treasurer from 1977 to 1987 and was Chairman of the Executive
Committee until its acquisition by SmithKline Beckman Corporation in 1988. He is
a Fellow of the American Society of Clinical Pathologists, the United States and
Canadian Academy of Pathology, the College of American Pathologists, and a life
fellow of the Royal Society of Tropical Medicine and Hygiene. Dr. Browne is a
Director of Aegis Sciences Corporation and Winchester Management. Dr. Browne was
a co-founder of TAb and has served on the Board of Directors since 1984.

A.J. KAZIMI, President and Chief Operating Officer. Mr. Kazimi
holds a life science degree from the University of Notre Dame and was a member
of a Research Team at Vanderbilt University Medical Center where he also studied
immunology, biochemistry and physiology at the graduate level. He obtained a
Master of Business Administration degree in finance and joined Brown-Forman
Corporation in 1983 where he held various financial and management positions. He
became Executive Assistant to the Chairman of Jack Daniel Distillery Lem Motlow
Prop. Inc. where he helped launch several new business ventures. Mr. Kazimi is
also a Director of Aegis Sciences Corporation and Aegis Analytical Labs. Mr.
Kazimi joined the Company in 1987 as Chief Operating Officer and Treasurer. He
served as Treasurer from 1987 to 1996 and was appointed to his present position
of President and Chief Operating Officer in April 1994.

JOHN LANDON, M.D., Executive Vice-President - Research &
Development. Dr. Landon was a co-founder of the Company in 1984. Associated with
the Medical College of St. Bartholomew's Hospital since 1968, he was Professor
and Chairman of the Department of Chemical Pathology until September 1995, since
when he has been a full time Executive Director of the Company responsible for
research and development and Chairman of TAb London and TAb Wales. Dr. Landon is
widely recognized as a pioneer in the use of antibodies for diagnostics and has
written many scientific articles, most of which are related to immunoassay. He
is a Fellow of the Royal College of Physicians, holds Gold Medals from the
British Society for Endocrinology and the Biochemical Society and has received
the Senior Investigator award from the American Clinical Ligand Assay Society.

TIM CHARD, M.D., Senior Vice President - Research and
Development Administration. Dr. Chard has been associated with the Medical
College of St. Bartholomew's Hospital since 1968 where he currently serves as
Professor and Chairman of the Department of Reproductive Physiology, and as
honorary consultant to the Royal Hospitals Trust. He was a

3
<PAGE> 7

co-founder of the Company in 1984 and is responsible for the administration and
patent affairs of the research and development work of the Company. Dr. Chard is
a recognized authority in the field of immunochemistry and is the author of a
standard textbook on laboratory immunology, as well as more than 400 scientific
articles. He is a member of the Editorial Board of a number of medical journals.
He is also a member of a World Health Organization expert panel on vaccines and
a Director of Transatlantic Capital Limited, a member of the British Venture
Capital Association.

THOMAS G. ANDREWS, Director. Mr. Andrews has been involved in
the investment business since 1966 specializing in early stage technology
companies, primarily in the healthcare field. He has been a Vice President of
Paine Webber Incorporated, and CEO and Chairman of Technology Management Corp.
and Andrews & Bohman, Inc., and is now CEO and Chairman of Andrews & Associates
Inc. Mr. Andrews is a Director of Andrews & Bohman, Inc., O.P.T.S. Computer
Development, J&J Engineering, Medical Equipment and Andrews & Associates. He was
founding Chairman of the Education and Auditory Research Foundation and also of
the Center for Medical Imaging Research at Vanderbilt University. Mr. Andrews
joined the Company's Board of Directors in 1985.

ROBERT C. HILTON, Director. Mr. Hilton worked in the U.S.
healthcare industry for many years before retiring in 1988 as Chairman and Chief
Executive Officer of American HealthCorp., Inc. He is founder, Chairman and
President of Home Technology Healthcare, Inc. and is a Director of Cracker
Barrel Old Country Stores, Inc., a company quoted on NASDAQ, and of a privately
owned company, Arcon Healthcare, Inc., Rural Health, and Home Technology
Healthcare, Inc. and is a member of the Tennessee Bar Association. He joined the
Company's Board of Directors in 1989.

STEVEN L. STROUP, M.D., Director. Dr. Stroup is Director of
Radiation Oncology at Centennial Medical Center, Nashville, Tennessee. He was a
member of the Board of Governors of Hospital Corporation of America where he was
Chairman of HCA's Centennial Medical Center in Nashville. He has been a Director
of the Nashville-Davidson County Unit of the American Cancer Society since 1975.
He joined the Company's Board of Directors in 1985.

JOSEPH D. WILLIAMS, Director. Mr. Williams spent his 47-year
career in the pharmaceutical industry. He joined Parke-Davis as a sales
representative in 1950 and held numerous executive positions becoming President
in 1973 following the merger of Parke-Davis and Warner-Lambert Company. He was
Chairman and Chief Executive Officer of Warner-Lambert Company from 1985 until
his retirement in 1992. He is a Director of J.C. Penney Company Inc., Eckerd
Corporation and Rockefeller Financial Services, Inc. He joined the Company's
Board of Directors in 1992.

There are no family relationships between any directors or
executive officers of the Company.

MEETINGS OF DIRECTORS AND COMMITTEES

During the last fiscal year, the Board of Directors held three
regular and two special meetings. All directors attended at least 80% of the
meetings of the Board of Directors held while they were directors. Additionally,
the Board of Directors took one action by unanimous written consent. The Board
of Directors has established the standing committees described below.

The Compensation Committee was appointed by the Board of
Directors to administer the Company's stock plans and recommend to the Board of
Directors compensation of the Company's executive officers. The Compensation
Committee was comprised during 1997 of Messrs. Williams, Hilton, Dr. Stroup and,
until his resignation from the Board in November, 1997, John Robb. During

4
<PAGE> 8
1997, the Compensation Committee held two meetings and each member attended each
meeting held while he was a director.

The Audit Committee was appointed by the Board of Directors to
recommend the annual appointment of the Company's auditors, with whom the Audit
Committee reviews the scope of audit and non-audit assignments and related fees,
accounting principles used by the Company in financial reporting, internal
auditing procedures and the adequacy of the Company's internal control
principles. During 1997, the Audit Committee was comprised of Messrs. Hilton,
Andrews, Williams and Robin Baillie, who resigned from the Board of Directors in
December 1997. During 1997, the Audit Committee held two meetings, and each
member attended each meeting held while he was a director.

The Nominating Committee was appointed by the Board to
evaluate and recommend to the Board of Directors potential candidates for
appointment to the Company's Board of Directors. Candidates may include
executive officers of the Company as well as persons who are not affiliated with
the Company or its subsidiaries. The Nominating Committee consisted in 1997 of
Drs. Landon, Stroup and Browne, Mr. Williams and, until his resignation, Mr.
Robb. The Nominating Committee held two meetings in 1997, and each member
attended both meetings.

COMPENSATION OF DIRECTORS

Directors who are employees of the Company receive no
additional compensation for serving on the Board of Directors or any committee
thereof. Other than stock options, directors not otherwise employed by the
Company historically have received no compensation for attending the meetings of
the Board of Directors or any committee meetings, although all directors receive
reimbursement for necessary travel expenses incurred in attending Board of
Directors or committee meetings. Robin Baillie, who served as a director between
June 1996 and December 1997, received a cash fee of U.K. (pound)10,000 for his
services during his first full year as a director. All directors were eligible
to participate in the Company's 1990 Stock Incentive Plan and are eligible to
participate in the 1997 Stock Option Plan, and the Company has historically
granted stock options to its directors.

ADOPTION OF AUDITED FINANCIAL STATEMENTS

Consistent with the customary practice of publicly traded
corporations in the United Kingdom, the Company is soliciting shareholder
adoption of the Company's audited financial statements for the most recently
completed fiscal year. Upon the recommendation of the Audit Committee, the Board
of Directors has approved the Company's audited financial statements for the
fiscal year ended December 31, 1997. These financial statements, together with
the notes thereto, were audited by the firm of Coopers & Lybrand L.L.P.,
Certified Public Accountants, as independent auditors of the Company and its
subsidiaries for the 1997 fiscal year, and appear in the Company's 1997 Annual
Report to Shareholders, which has been provided separately to the Company's
shareholders.

The affirmative vote of a majority of the votes cast at the
meeting is needed to receive and adopt the Company's financial statements for
the fiscal year ended December 31, 1997. If such financial statements are not
adopted, the matter will be referred to the Audit Committee for further review.

The Board recommends that the shareholders vote FOR receipt
and adoption of the Company's audited financial statements for the fiscal year
ended December 31, 1997.

5
<PAGE> 9

SELECTION OF INDEPENDENT ACCOUNTANTS

Upon the recommendation of the Audit Committee, the Board of
Directors has appointed the firm of Coopers & Lybrand L.L.P., Certified Public
Accountants, as independent auditors of the Company and its subsidiaries for the
1998 fiscal year, subject to the approval of the shareholders. This firm has
served as the independent auditors of the Company since 1989. Representatives of
this firm are expected to be present at the meeting and will have an opportunity
to make a statement if they desire and will be available to respond to
appropriate questions.

The affirmative vote of a majority of the votes cast at the
meeting is needed to ratify the appointment of Coopers & Lybrand L.L.P. as
auditors of the Company for 1998. If the appointment is not approved, the matter
will be referred to the Audit Committee for further review.

The Board recommends that the shareholders vote FOR
ratification of the appointment of Coopers & Lybrand L.L.P. as auditors of the
Company for 1998 and authorization of the Board of Directors to fix their
remuneration.

APPROVAL OF CERTIFICATE OF AMENDMENT
TO CERTIFICATE OF INCORPORATION

REASONS FOR AMENDMENT

The Company is seeking shareholder approval of an amendment to
the Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") to (i) increase the number of authorized shares
of Common Stock and (ii) authorize a number of shares which may be designated as
preferred stock ("Preferred Stock").

The Company is considering raising additional capital to
finance its research and development activities and for general corporate
purposes. The proposed amendments are directly related to the Company's proposed
financing plans. The Company's Certificate of Incorporation currently authorizes
30,000,000 shares of Common Stock. No shares of Preferred Stock are authorized.
Should the Board of Directors determine that it is appropriate to issue
convertible securities as part of its fund raising, the Company's Certificate of
Incorporation must authorize a sufficient number of shares of Common Stock for
issuance upon conversion as of the date the convertible securities are first
issued. Accordingly, the Board of Directors of the Company has determined that
it is in the best interests of the Company to seek shareholder approval of an
increase in the number of authorized shares of Common Stock at the Annual
Meeting.

The Board of Directors has also determined that it is in the
best interests of the Company to amend the Certificate of Incorporation to
authorize shares of Preferred Stock. Although the Company has not determined
that shares of Preferred Stock will be sold, the Board of Directors has
determined that such authorization is necessary to obtain financing on the most
favorable terms, and will give the Board of Directors more flexibility to
structure any future transaction.

On March 23, 1998, the Board of Directors approved the
proposed Certificate of Amendment to the Company's Amended and Restated
Certificate of Incorporation (the "Amendment"), as further described below.
Unless the Amendment is approved by the Company's shareholders, the financing
alternatives available to the Company will be limited, and may require the
Company to pursue other financing arrangements, either in the United States or
abroad, as to which it has no current plans or commitments.

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<PAGE> 10

PREFERRED STOCK

If the Amendment is approved by shareholders at the Annual
Meeting, the Company's Board of Directors would have the authority, subject to
limitations prescribed by Delaware law, to designate one or more series of
Preferred Stock, to fix the number of shares constituting each series of
Preferred Stock and the designations and powers, preferences and relative
participating, optional or other special rights and qualifications, limitations
or restrictions thereof, including such provisions as may be desired concerning
voting, redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and such other subjects or matters as may be fixed by
resolution of the Board of Directors. The issuance of Preferred Stock, while
providing flexibility in raising capital for research and development and
general corporate purposes, could, among other things, adversely affect the
voting power of the holders of Common Stock and, under certain circumstances,
make it more difficult for a third party to acquire, or discourage a third party
from acquiring, a majority of the outstanding voting stock of the Company.

If the Board of Directors decides to issue shares of Preferred
Stock, the Board of Directors would authorize the Company to file with the
Delaware Secretary of State a Certificate of Designation, pursuant to which a
number of shares of the Company's capital stock would be designated as a series
of Preferred Stock, having such rights and preferences as the Board of
Directors, in its sole discretion, may determine.

AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

The Amended and Restated Certificate of Incorporation of the
Company currently authorizes the issuance of 30,000,000 shares of Common Stock,
par value $.001 per share. On March 23, 1998, the Board of Directors of the
Company approved an amendment to the Company's Amended and Restated Certificate
of Incorporation to change the number of authorized shares to 40,000,000 shares
of capital stock, divided into two classes as follows: (i) 39,000,000 shares of
Common Stock, par value $.001 per share, and (ii) 1,000,000 shares of Preferred
Stock, par value $.01 per share. The Amendment would provide that the Board of
Directors of the Company would have the authority to designate one or more
series of Preferred Stock having such rights and preferences as the Board may
from time to time determine, and to issue such shares as so designated. A
complete copy of the proposed Certificate of Amendment to Amended and Restated
Certificate of Incorporation will be available for inspection at the Annual
Meeting or at the Company's offices.

REQUIRED VOTE

Shareholder approval of the Amendment is required by the terms
of the Company's Certificate of Incorporation, Delaware law and the Listing
Rules of the London Stock Exchange. Adoption of the Amendment is conditioned on
the affirmative vote of the holders of a majority of the shares of Common Stock
present or represented and entitled to vote at the Annual Meeting.

The foregoing is intended to be a description of the principal
features of the Amendment and is qualified in its entirety by reference to the
complete text of the Certificate of Amendment to Amended and Restated
Certificate of Incorporation, a copy of which will be available for inspection
at the Annual Meeting. A copy of the Certificate of Amendment is also available
from the Company upon request, or may be inspected at the principal office of
the Company at 1207 17th Avenue South, Suite 103, Nashville, Tennessee 37212 or
the office of TAb London Limited at 14-15 Newbury Street London EC1A 7HU during
normal business hours on any weekday (Saturdays, Sundays and public holidays
excepted) from the date of this document until the Annual Meeting and at the
place of the Annual Meeting fifteen minutes before the meeting and during the
meeting. See, "General Information."

The Board of Directors recommends that the shareholders vote
FOR the adoption of the Amendment which the Board considers to be in the best
interests of shareholders as a whole.

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<PAGE> 11

EXECUTIVE OFFICERS

The executive officers of the Company are as follows:

Name Age Position
- ---- --- --------
<S> <C> <C>
Martin S. Brown 59 Chairman of the Board

Andrew J. Heath, M.D. 49 Vice Chairman of the Board and Chief
Executive Officer

Harry G. Browne, M.D. 68 Vice Chairman of the Board and Secretary

A. J. Kazimi 40 President and Chief Operating Officer

John Landon, M.D. 67 Executive Vice President - Research and
Development

Tim Chard, M.D. 60 Senior Vice President - Research and Development
Administration

Glyn O. Edwards 42 Vice President - Business Development

Carol Clark-Evans 38 Vice President of Regulatory and Clinical Affairs
</TABLE>

GLYN O. EDWARDS, Vice President - Business Development. Mr.
Edwards has worked with Celltech Plc and 3M United Kingdom PLC. He was a founder
of Oros Instruments Limited, and is a director and shareholder of Elara
Associates Limited. From 1995 until 1998, Mr. Edwards worked as a consultant to
the Company through Elara Associates Limited. He became the Vice President -
Business Development in January, 1998.

CAROL CLARK-EVANS, Vice President of Regulatory and Clinical
Affairs. Ms. Clark-Evans held regulatory positions at Pharmacia & Upjohn, Inc.
and Solvay Pharmaceuticals, Inc. and was Manager, Regulatory Affairs at Corning
Besselaar, Inc., one of the world's largest contract research organizations. She
joined the Company in 1996 and is responsible for its worldwide regulatory
affairs.

8
<PAGE> 12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of shares held
beneficially, directly or indirectly, as of March 13, 1998, by (i) all
beneficial owners of more than 5% of the Company's Common Stock, (ii) all
directors and Named Executive Officers of the Company, and (iii) all directors
and executive officers as a group, together with the percentage of the
outstanding shares which such ownership represents.

NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (3) PERCENT OF CLASS (4)
- ------------------- --------------------------- --------------------
<S> <C> <C>
Martin S. Brown (1) (2) 2,895,633(5) 12.3%

Andrew J. Heath, M.D. 15,000 *

Harry G. Browne, M.D. (1)(2) 518,289(6) 2.2

A. J. Kazimi (1) (2) 373,000(7) 1.6

John Landon, M.D. (1) (2) 1,092,325(8) 4.7

Tim Chard, M.D. (1) 1,050,790(9) 4.5

Glyn O. Edwards(2) 12,000(10) *
20 Ashley Park
Maidenhead, Berks (U.K.) SL6 8EZ

Steven L. Stroup, M.D. 423,200(11) 1.8
Columbia Centennial Medical Center
2300 Patterson
Nashville, TN 37203

Joseph D. Williams 263,672(12) 1.1
182 Tabor Rd.
Morris Plains, NJ 07950

Robert C. Hilton 157,424(13) *
2100 West End Ave.
Nashville, TN 37203

Thomas G. Andrews 152,445(14) *
2207 Crestmoor
Nashville, TN 37215

All directors and executive officers 6,980,254(15) 28.7
as a group (12 persons)

Republic of Singapore 1,563,250 6.8
54 Lombard Street
London
EC3T 3AH
</TABLE>

- -----------------------------
* Indicates less than 1% ownership
(1) The address for Messrs. Brown, Heath, Browne, Kazimi, Landon and Chard
is c/o the Company, 1207 17th Avenue South, Suite 103, Nashville,
Tennessee 37212.
(2) Named Executive Officers.
(3) Beneficial ownership is deemed to include shares of the Company's
Common Stock which an individual has a right to acquire within 60 days
of the date of this Proxy Statement upon the exercise of options. The
table includes options granted under the Company's 1990 Stock Incentive
Plan and its 1997 Stock Option Plan

<PAGE> 13

(collectively, the "Option Plans"). These shares are deemed to be
outstanding for the purposes of computing the percentage ownership of that
individual but are not deemed outstanding for the purposes of computing
the percentage of any other person. Unless otherwise noted in the
following footnotes, the persons as to whom information is given had sole
voting and investment power over the shares of Common Stock shown as
beneficially owned.
(4) Computation based upon 23,252,825 shares outstanding on March 13, 1998.
(5) Includes 179,804 shares of Common Stock owned by Mr. Brown's spouse,
64,000 shares of Common Stock issuable upon the exercise of warrants
outstanding, 6,250 shares of Common Stock registered in the name of the
Cockayne Fund, Inc., over which Mr. Brown shares investment control,
170,000 shares of Common Stock issuable upon the exercise of options
granted pursuant to the Option Plans, 68,449 shares of Common Stock held
in an Individual Retirement Account, 645,706 shares of Common Stock held
by the Atticus Trust of which Mr. Brown is a trustee, and 30,000 shares
of Common Stock issuable upon the exercise of outstanding warrants held
by the Atticus Trust.
(6) Includes 207,500 shares of Common Stock issuable upon the exercise of
options granted pursuant to the Option Plans, 254,789 shares registered
in the name of the Browne Family Trust, and 56,000 shares registered in
the name of the Margaret G. Browne Trust, of which Dr. Browne is a
trustee.
(7) Includes 95,000 shares of Common Stock issuable upon the exercise of
options granted pursuant to the Option Plans.
(8) Includes 1,142 shares of Common Stock owned by Dr. Landon's spouse and
115,000 shares of Common Stock issuable upon the exercise of options
granted pursuant to the Option Plans.
(9) Includes 45,000 shares of Common Stock issuable upon the exercise of
options granted pursuant to the Option Plans.
(10) Includes 12,000 shares issuable upon the exercise of options granted
pursuant to the Option Plans.
(11) Includes 14,000 shares of Common Stock issuable upon the exercise of
outstanding warrants, 30,000 shares of Common Stock issuable upon the
exercise of options granted pursuant to the Option Plans and 64,218 shares
held in a profit sharing plan.
(12) Includes 5,000 shares of Common Stock issuable upon the exercise of
outstanding warrants and 130,000 shares of Common Stock issuable upon
the exercise of options granted pursuant to the Option Plans.
(13) Includes 10,000 shares of Common Stock issuable upon the exercise of
outstanding warrants and 49,000 shares of Common Stock issuable upon
the exercise of options granted pursuant to the Option Plans.
(14) Includes 35,925 shares of Common Stock owned by Mr. Andrews' spouse and
39,500 shares of Common Stock issuable upon the exercise of options
granted pursuant to the Option Plans.
(15) Includes 123,000 shares of Common Stock issuable upon the exercise of
outstanding warrants and 917,000 shares of Common Stock issuable upon
the exercise of options granted pursuant to the Option Plans.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

All filings under Section 16(a) of the Securities Act of 1934
required to be made by directors, executive officers and 10% shareholders of the
Company during 1997 were made on a timely basis.

LEGAL PROCEEDINGS

There is no pending litigation against the Company.

10
<PAGE> 14

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth for the years ended December
31, 1995, 1996 and 1997, the compensation paid to or accrued by or on behalf of
the Company's Chairman and Chief Executive Officer and the four other most
highly compensated executive officers of the Company (collectively, the "Named
Executive Officers") whose cash compensation was in excess of $100,000.

LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION(1) AWARDS PAYOUTS
-------------------------------------------------------- ----------------------- ----------
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) OPTIONS(#) PAYOUTS($) COMPENSATION($)
- ------------------ ---- --------- -------- --------------- --------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Martin S. Brown 1997 $196,667 $0 $___(2) $0 0 $0 $0
Chairman 1996 170,000 0 0 0 90,000 0 0
1995 153,158 0 0 0 0 0 0

A.J. Kazimi 1997 $171,548 $0 $___(3) $0 0 $0 $0
President, 1996 155,139 0 0 0 60,000 0 0
Chief 1995 142,900 0 0 0 0 0 0
Operating
Officer

John Landon, M.D. 1997 pound 90,000(4) pound 5,000 pound 0 pound 0 0 pound 0 pound 0
Executive Vice 1996 82,000 0 0 0 45,000 0 0
President - 1995 52,000 0 0 0 15,000 0 0
Research and
Development

Glyn O. Edwards 1997 pound 75,000(5) pound 20,000 0 pound 0 40,000 pound 0 pound 0
Vice President 1996 0 0 0 0 6,000 0 0
- Business 1995 0 0 0 0 20,000 0 0
Development

Harry G. Browne, 1997 $105,000 $0 $0 $0 0 $0 $0
M.D. 1996 78,333 0 0 0 15,000 0 0
Vice Chairman, 1995 75,000 0 0 0 0 0 0
Secretary

</TABLE>

- -----------------------------

(1) These executive officers did not receive any annual compensation not
properly categorized as salary, except for certain perquisites or other
benefits the aggregate incremental cost of which to the Company for each
officer did not exceed the lesser of $50,000 or 10% of the total of
annual salary and bonus reported for each such officer.
(2)

(3)

(4) Dr. Landon is employed by the Company's TAb Wales Limited subsidiary and
is compensated in British Pounds. Stated in December 31, 1997 U.S.
Dollars, Dr. Landon's salary for 1997, 1996 and 1995 was $156,275,
$134,890 and $85,540, respectively.
(5) Mr. Edwards is compensated in British Pounds. Stated in December 31, 1997
U.S. Dollars, Mr. Edwards' salary and bonus for 1997 was $156,275. For
years prior to 1997, Mr. Edwards, through Elara Associates Limited,
performed services for the Company on a consulting basis

11
<PAGE> 15

LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION(1) AWARDS PAYOUTS
------------------------------------------------- ----------------------- ----------
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) OPTIONS(#) PAYOUTS($) COMPENSATION($)
- ------------------ ---- --------- -------- --------------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Martin S. Brown 1997 $196,667 $0 $______(2) $0 0 $0 $0
Chairman 1996 170,000 0 0 0 90,000 0 0
1995 153,158 0 0 0 0 0 0

A.J. Kazimi 1997 $171,548 $0 $______(3) $0 0 $0 $0
President, 1996 155,139 0 0 0 60,000 0 0
Chief Operating 1995 142,900 0 0 0 0 0 0
Officer

John Landon, M.D. 1997 90,000 5,000 0 0 0 0 0
Executive Vice 1996 82,000 0 0 0 45,000 0 0
President - 1995 52,000 0 0 0 15,000 0 0
Research and
Development

Glyn O. Edwards 1997 75,000(5) 20,000 0 0 40,000 0 0
Vice President 1996 0 0 0 0 6,000 0 0
- Business 1995 0 0 0 0 20,000 0 0
Development

Harry G. Browne, 1997 $105,000 $0 $0 $0 0 $0 $0
M.D. 1996 78,333 0 0 0 15,000 0 0
Vice Chairman, 1995 75,000 0 0 0 0 0 0
Secretary

</TABLE>

- -----------------------------

(3)

11
<PAGE> 16

and, therefore, received no salary, bonuses or other compensation as an
employee of the Company.

The Company has no long-term incentive plans, as that term is
defined in Securities and Exchange Commission regulations, and the Company has
no defined benefit or actuarial plans covering employees of the Company. The
Company granted no Stock Appreciation Rights ("SARs") in 1997.

<PAGE> 17

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information regarding
grants of stock options made to the Named Executive Officers during 1997.

POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (2)
-------------------------------------------------------------- ---------------------------
PERCENTAGE OF
NUMBER OF TOTAL OPTIONS
SECURITIES GRANTED TO EXERCISE OR
UNDERLYING EMPLOYEES IN BASE PRICE EXPIRATION
NAME OPTIONS GRANTED FISCAL YEAR ($/SH)(1) DATE 5%($) 10%($)
- --------------- --------------- ------------ ----------- ---------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Martin S. Brown 0 0% N/A N/A $ 0 $ 0

A. J. Kazimi 0 0% N/A N/A 0 0

John Landon, M.D. 0 0% N/A N/A 0 0

Glyn O. Edwards 25,000(3) .5% $6.00 5/31/07 94,500 145,000
15,000(4) .3% $4.50 11/20/07 42,600 108,000

Harry G. Browne 0 0% N/A N/A 0 0
</TABLE>

- ---------------------
(1) All options were granted at or above the fair market value on the date of
grant, which value, prior to the Company's initial public offering in
1996, was determined by the Board of Directors.
(2) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There can
be no assurance provided to any executive officer or any other holder of
the Company's securities that the actual stock price appreciation over the
term will be at the assumed 5% and 10% levels or at any other defined
level. Unless the market price of the Common Stock appreciates over the
option term, no value will be realized from the option grants made to the
Named Executive Officers.
(3) 5,000 options become exercisable on each of 6/1/98, 6/1/99, 6/1/00, 6/1/01
and 6/1/02.
(4) 9,000 options become exercisable on 11/20/2000; 3,000 options become
exercisable on each of 11/20/2001 and 11/20/2002.

<PAGE> 18

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

None of the Named Executive Officers exercised any stock
options in 1997. The following table provides certain information, with respect
to the Named Executive Officers, concerning the unexercised options at December
31, 1997.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR END (#) FISCAL YEAR END ($)
------------------------------ ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Martin S. Brown 140,000 60,000 $134,500 $0

A. J. Kazimi 75,000 40,000 $ 67,250 $0

John Landon, M.D. 100,000 30,000 $106,750 $0

Glyn O. Edwards 6,000 60,000 $ 0 $0

Harry G. Browne 202,500 10,000 $464,125 $0
</TABLE>

EMPLOYMENT AGREEMENTS

The Company, through its TAb Wales Limited subsidiary, entered
into a Service Agreement with Dr. Landon effective July 1, 1996, pursuant to
which Dr. Landon is employed as Executive Vice President - Research and
Development. Dr. Landon's base annual salary under the Service Agreement is
(pound)82,000, subject to annual review. The agreement is terminable by either
party upon not less than 12 months prior written notice. There are no provisions
in the Service Agreement for compensation upon early termination of Dr. Landon's
employment. The Service Agreement also provides that Dr. Landon shall keep
confidential certain information acquired in connection with his services on
behalf of the Company and shall apply for and assign to the Company all
intellectual property rights relating to methods, devices, inventions or
improvements made or discovered by Dr. Landon in the course of his duties for
the Company. Dr. Landon further agrees, for a period of one year after the
termination of his employment with the Company, not to solicit the business or
employees of the Company or to compete with the Company within certain
geographical areas.

The Company entered into an Employment Agreement with Andrew
J. Heath, effective February 6, 1998, pursuant to which Dr. Heath is employed as
Vice Chairman and Chief Executive Officer of the Company. Dr. Heath's base
annual salary under the Employment Agreement is $215,000, subject to periodic
review. In addition to the annual base salary, Dr. Heath is entitled to receive
an annual bonus, the amount of which is determined by the Compensation Committee
of the Board of Directors at its sole discretion. The Employment Agreement is
terminable by either party upon thirty days prior written notice. Upon
termination by the Company without cause, Dr. Heath is entitled to severance
compensation in the amount of his annual base salary. The Employment Agreement
also provides that Dr. Heath keep confidential certain information acquired in
connection with his services on behalf of the Company pursuant to the terms of a
Confidentiality Agreement dated February 7, 1998 between the Company and Dr.
Heath. Dr. Heath further agrees, for a period of two years after the termination
of his employment with the Company, not to solicit the business or employees of
the Company within the United States or the United Kingdom.

<PAGE> 19

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee of the Company's
Board of Directors are Mr. Williams, Mr. Hilton and Dr. Stroup. There are no
interlocking relationships among the members of the Compensation Committee.

1990 STOCK INCENTIVE PLAN

The Board of Directors of the Company has adopted, with
approval of the Company's shareholders, the 1990 Stock Incentive Plan as amended
(the "1990 Plan"). The 1990 Plan provides for the grant to (i) key employees of
the Company of stock options complying with Section 422A of the Internal Revenue
Code ("incentive stock options") or (ii) advisors, officers and directors of the
Company of stock options not qualifying under such provision ("non-qualified
options"), for the purchase of an aggregate of up to 1,650,000 shares of Common
Stock, as well as stock appreciation rights ("SARs"). The 1990 Plan provides for
adjustment of the number of shares available under the Plan in the event of
stock splits, stock dividends and certain other events. The 1990 Plan also
provides that if the Company shall not be the surviving corporation in a
business combination, the holder of an outstanding option will be entitled to
purchase stock in the surviving corporation on the same terms and conditions as
the option. Options are non-transferable, and options and SARs are subject to
any restrictions contained in the grant and applicable securities laws.

1997 STOCK OPTION PLAN

In 1997, the Board of Directors of the Company adopted and the
Company's shareholders approved at the 1997 Annual Meeting of Shareholders, the
Company's 1997 Stock Option Plan (the "1997 Stock Option Plan"). The 1997 Stock
Option Plan provides for the grant of stock options and stock appreciation
rights ("SARs") to directors, employees, consultants or advisors of the Company.
The 1997 Stock Option Plan distinguishes between stock options granted to (a)
eligible plan participants, generally ("Eligible Participants"), and (b) plan
participants who are residents of the United Kingdom and who are eligible to
participate ("U.K. Participants"), and contains provisions applicable to the
grant of options to each. Options granted to Eligible Participants pursuant to
the 1997 Stock Option Plan may, at the discretion of the Compensation Committee,
be incentive stock options or non-qualified options. A total of 1,100,000 shares
of Common Stock have been reserved for issuance under the 1997 Stock Option
Plan. The 1997 Stock Option Plan provides for adjustment of the number of shares
available under the plan in the event of stock splits, stock dividends and
certain other events. The 1997 Stock Option Plan also provides that if the
Company shall not be the surviving corporation in a business combination, all
outstanding options will terminate, provided that, subject to certain
limitations under the Internal Revenue Code, all outstanding options shall
become exercisable immediately prior to such transaction whether or not the
vesting requirements of such options have been satisfied, unless the
Compensation Committee elects to convert all options into options to purchase
stock of an acquiring corporation. Options are non-transferable, except by will
or pursuant to the laws of descent and distribution; provided, that
non-qualified options may be transferable to the extent provided in the
applicable stock option agreement. Options and SARs are also subject to any
restrictions contained in the grant and applicable securities laws.

401(K) PLAN

The Company has established the Therapeutic Antibodies Inc.
401(k) Savings Plan (the "401(k) Plan"), which is a qualified retirement plan
under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as
amended. All U.S. employees of the Company are eligible to participate in the
401(k) Plan after completion of one year of employment. The 401(k) Plan permits
eligible employees to contribute from 1% to 15% of their earnings to the 401(k)
Plan by payroll deduction, subject to certain other statutory limits. The 401(k)
Plan permits the Company to make

15
<PAGE> 20

discretionary matching contributions or other employer contributions to the
401(k) Plan each year. The Company currently does not make matching
contributions to the 401(k) Plan.

16
<PAGE> 21

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

GENERAL

The Board of Directors of the Company has a Compensation
Committee consisting of Mr. Hilton, Dr. Stroup and Mr. Williams. The
Compensation Committee has the responsibility for establishing and administering
a general compensation policy and program for the Company. The Compensation
Committee also is responsible for administering all of the Company's employee
benefit plans, including all stock option plans, bonus plans, retirement plans,
medical and insurance plans. Subject to the provisions of these employee benefit
plans, the Compensation Committee must determine the individuals eligible to
participate in each one of the plans, the extent of such participation and the
terms and conditions under which benefits may be vested, received or exercised.

EXECUTIVE COMPENSATION

The Compensation Committee intends for the Company's executive
compensation program to attract, motivate and retain key executive officers of
the Company, its subsidiaries and affiliated entities, and to provide for (i)
base salaries competitive with those paid by comparable biotechnology companies,
(ii) variable annual incentives which would reflect executive officers'
contributions to the Company's annual performance objectives, and (iii) a
variable long-term incentive program utilizing equity ownership in the Company
which would reflect executive officers' contributions to the Company's
achievement of longer-term goals.

Executive compensation for the Company in 1997 was comprised
of three elements: (1) base salaries, (2) incentive bonus compensation and (3)
equity-based compensation.

Base Salary. The Compensation Committee endeavors to establish
base salary levels for executives of the Company which are consistent with those
provided for similarly situated executives of other biotechnology companies. In
establishing such levels, the Committee considers compensation for executives of
other publicly traded biotechnology companies, as well as other publicly traded
companies of similar size and with a similar growth rate. As a development stage
company without substantial earnings, however, the Committee must balance the
need to attract and retain key scientists and executives with budgetary
constraints. The annual salaries for the executive officers of the Company are
usually approved by the Board of Directors, upon recommendation of the
Compensation Committee, at the Board of Directors' annual meeting each April.
The 1997 salaries of the Company's executive officers were established or
adjusted based on management's subjective assessment of the nature of their
positions, the experience of the individuals filling the positions and the
tenure of such individuals with and their general contribution to the Company.

Incentive Bonus Compensation. In addition to base salary, the
Compensation Committee recommends to the Board of Directors cash incentive
compensation for certain executives of the Company, based upon each such
executive's success in meeting qualitative and quantitative performance goals on
an annual basis. Bonus determinations are made on a case-by-case basis, taking
into account appropriate quantitative and qualitative factors, and there is no
fixed relationship between any particular performance factor and the amount of a
given executive's bonus.

Equity-Based Compensation. In addition to cash incentive
compensation, the Company has always utilized equity-based compensation in the
form of stock options as an incentive to encourage its executives to work to
meet its operational goals. The Compensation Committee reviews and administers
the 1990 Stock Incentive Plan and 1997 Stock Option Plan, under which granted
options typically vest over a one to ten-year period. Specific grants are
determined taking

17
<PAGE> 22

into account an executive's current responsibilities and historical performance,
as well as the executive's perceived contribution to the Company's results of
operations. Options are also used to give incentive to newly-promoted officers
at the time that they are asked to assume greater responsibilities. In
evaluating option grants, the Compensation Committee considers prior grants and
shares currently held, as well as the recipient's success in meeting operational
goals and the recipient's level of responsibility. However, no fixed formula is
utilized to determine particular grants. The Compensation Committee believes
that the opportunity to acquire a significant equity interest in the Company is
a strong motivation for the Company's executives to pursue the long-term
interests of the Company and its stockholders, and promotes the retention of key
executives.

In addition, the Company has a health benefits plan and a
401(k) Plan in which all U.S. employees, including the Named Executive Officers,
are permitted to participate. All employees and Named Executive Officers are
subject to the same terms and conditions relating to eligibility and are subject
to the same limitations as to amounts that may be contributed.

CHIEF EXECUTIVE OFFICER COMPENSATION FOR FISCAL YEAR 1997

As Chairman of the Board and Chief Executive Officer of the
Company during 1997, Martin Brown's annual base salary for 1997 was set at
$210,000, effective April 1997 until April 1998. This salary level was
determined with regard to the progress made by the Company in the advancement of
its various products and the Compensation Committee's review of executive
compensation for executive officers of other biotechnology companies.

COMPENSATION COMMITTEE

Robert C. Hilton
Steven L. Stroup, M.D.
Joseph D. Williams

18
<PAGE> 23

COMPARATIVE PERFORMANCE GRAPH

The Commission requires the Company to include in this Proxy
Statement a line graph which compares the yearly percentage change in cumulative
total shareholder return on the Company's Common Stock with (a) the performance
of a broad equity market indicator, and (b) the performance of a published
industry index or peer group. The following graph compares the yearly percentage
change in the return on the Company's Common Stock since June 30, 1995, the
effective date of the Company's Registration Statement of Form 10 filed with the
Securities and Exchange Commission, with the cumulative total return on the CRSP
Index for Nasdaq Stock Market Companies (U.S. and Foreign) and the CRSP Index
for Nasdaq Stock Market Pharmaceutical Companies (U.S. and Foreign). The graph
assumes the investment on June 30, 1995 of $100 in the Company's Common Stock
and that all dividends were reinvested at the time they were paid.

<TABLE>
<CAPTION>
6/30/95 12/31/95 6/30/96 12/31/96 06/30/97 12/31/97
- ------- -------- ------- -------- -------- --------
Dollars
<S> <C> <C> <C> <C> <C>
$250.00 $200.00 $150.00 $100.00 $50.00 $0.00
</TABLE>

- -------------------------------------------------------------------------------
LEGEND
<TABLE>
<CAPTION>

Symbol CRSP Total Returns Index for: 6/30/95 12/31/95 12/31/96 12/31/97
- ------ ----------------------------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
[ ] Nasdaq Stock Market (US and Foreign) $100.00 $112.50 $138.31 $169.20

+ Nasdaq Stocks (SIC 2830-2839 US and
Foreign) Pharmaceuticals $100.00 $146.00 $146.18 $151.00

- Therapeutic Antibodies Inc. $100.00 $137.50 $152.00 $142.22
</TABLE>

NOTES:

A. The lines for Nasdaq indexes represent monthly index levels
derived from compounded daily returns that include all
dividends.
B. Prior to the Company's initial public offering on July 23, 1996,
returns were calculated based on the offering price for the
Company's Common Stock as determined by the Board of Directors
and may not be indicative of the actual market price for the
Common Stock or actual returns thereon.
C. Subsequent to July 23, 1996, returns were calculated based on
the closing prices of the Company's Common Stock on the
measurement dates as reported on the London Stock Exchange.
D. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
E. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
F. The index level for all series was set to $100.00 on 6/30/95.
- --------------------------------------------------------------------------------

<PAGE> 24

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 1995 and 1996, Martin Brown provided personal
guarantees of the Company's indebtedness in the principal amount of $1,000,000
to SunTrust Bank, Nashville, N.A. ("SunTrust Bank"), which were secured by real
estate, securities or by a personal general pledge. On April 12, 1996, Mr. Brown
obtained a $1,000,000 secured credit facility from SunTrust Bank. Mr. Brown used
this facility to repay in full the Company's $450,000 note payable to SunTrust
Bank (which note had been guaranteed by Mr. Brown), and to advance $550,000 to
the Company for working capital purposes. To evidence this debt, the Company
issued to Mr. Brown, on April 12, 1996, a 30-day note bearing interest at 12%
per annum, which note was renewed for an additional 30 days on May 12, 1996. On
June 7, 1996, the Company repaid to Mr. Brown $500,000 of this obligation and
issued to Mr. Brown a new 60-day note for $500,000 bearing interest at an annual
rate of 12%. Also on June 7, 1996, Mr. Brown purchased two units (at $250,000
each) of the Company's 15% Subordinated Promissory Notes due May 1, 1997 (the
"15% Notes"), which the Company was then offering to investors. On June 18,
1996, the Company repaid to Mr. Brown $250,000 principal amount of the June 7,
1996 $500,000 note and Mr. Brown purchased an additional $250,000 unit of the
Company's 15% Notes. The Company evidenced the balance of its obligation to Mr.
Brown by issuing him a new promissory note in the principal amount of $250,000
bearing interest at an annual rate of 12%, which note is payable in full,
together with accrued interest, on December 31, 1998.

GENERAL INFORMATION

SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING

Shareholder proposals intended to be presented at the 1999
annual meeting of shareholders must be received by the Company at its executive
offices at 1207 17th Avenue South, Suite 103, Nashville, Tennessee 37212 no
later than December 29, 1998, in order to be included in the proxy statement and
form of proxy for that meeting.

COUNTING OF VOTES

All matters specified in this Proxy Statement that are to be
voted on at the Annual Meeting will be by written ballot. Inspectors of election
will be appointed to, among other things, determine the number of shares
outstanding, the shares represented at the Annual Meeting, the existence of a
quorum and the authenticity, validity and effect of proxies, to receive votes of
ballots, to hear and determine all challenges and questions in any way arising
in connection with the right to vote, to count and tabulate all votes and to
determine the result. Each item presented herein to be voted on at the Annual
Meeting must be approved by the affirmative vote of the holders of the number of
shares described under each such item. The inspectors of election will treat
shares represented by proxies that reflect abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions, however, do not constitute a vote "for" or "against" any
matter and thus will be disregarded in the calculation of "votes cast".

Inspectors of election will treat shares referred to as
"broker non-votes" as shares that are present and entitled to vote for purposes
of determining the presence of a quorum. However, for purposes of determining
the outcome of any matter as to which the broker has physically indicated on the
proxy that it does not have discretionary authority to vote, those shares will
be treated as not present and not entitled to vote with respect to that matter
(even though those shares are considered entitled to vote for quorum purposes
and may be entitled to vote on other matters).

<PAGE> 25

MISCELLANEOUS

The solicitation of proxies in the enclosed form is made on
behalf of the Board of Directors of the Company. The entire cost of soliciting
these proxies will be borne by the Company. In addition to being solicited
through the mails, proxies may be solicited personally or by courier service,
telephone or telegraph by officers, directors and employees of the Company, who
will receive no additional compensation for such activities. Arrangements will
also be made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of shares
held of record by such persons, who will be reimbursed for their reasonable
expenses incurred in such connection.

A copy of the Company's 1997 Annual Report to Shareholders is
being mailed along with this Proxy Statement.

UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL
OWNER OF COMMON STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING, THE COMPANY,
WITHOUT CHARGE, WILL PROVIDE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1997, TOGETHER WITH THE FINANCIAL STATEMENT SCHEDULES,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE
DIRECTED TO SAUL KOMISAR, THERAPEUTIC ANTIBODIES INC., 1207 17TH AVENUE SOUTH,
SUITE 103, NASHVILLE, TENNESSEE 37212.

BY ORDER OF THE BOARD OF DIRECTORS
Nashville, Tennessee Harry G. Browne, M.D.
April 1, 1998 Secretary

21
<PAGE> 26

Appendix A

PROXY CARD

THERAPEUTIC ANTIBODIES INC.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1998

THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS.

The undersigned hereby appoints Martin S. Brown and Harry G.
Browne, M.D., or either of them, with power of substitution or ________________,
as Proxy(ies) to vote all stock of Therapeutic Antibodies Inc. owned by the
undersigned at the Annual Meeting of Shareholders to be held at the University
Club of Nashville, located at 2402 Garland Avenue, Nashville, Tennessee 37212,
at 5:30 p.m. on April 27, 1998, and any adjournment thereof, on the following
items of business and such other business as may properly come before the
meeting.

1. THE ELECTION AS DIRECTORS OF ALL NOMINEES LISTED BELOW:

NOMINEE FOR AGAINST NOMINEE FOR AGAINST
- ------- --- ------- ------- --- -------
<S> <C> <C> <C> <C> <C>

Thomas G. Andrews ________ ________ Robert C. Hilton ________ ________
Martin S. Brown ________ ________ A. J. Kazimi ________ ________
Harry G. Browne, M.D. ________ ________ John Landon, M.D. ________ ________
Tim Chard, M.D. ________ ________ Steven L. Stroup, M.D. ________ ________
Andrew J. Heath, M.D. ________ ________ Joseph D. Williams ________ ________
</TABLE>

2. THE ADOPTION OF THE ANNUAL REPORT TO SHAREHOLDERS AND THE AUDITED FINANCIAL
STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1997. ______ FOR ______ AGAINST

3. THE RATIFICATION AND APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
AUDITORS OF THE COMPANY AND ITS SUBSIDIARIES FOR THE COMPANY'S 1998 FISCAL
YEAR. ______ FOR ______ AGAINST

4. THE APPROVAL AND AUTHORIZATION OF THE COMPANY TO FILE THE CERTIFICATE
OF AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION, THE PRINCIPAL TERMS OF WHICH ARE DESCRIBED IN THE PROXY
STATEMENT. ______ FOR ______ AGAINST

5. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.

THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THE PROXY DESIGNATED HEREBY WILL EXERCISE HIS OR HER DISCRETION AS TO WHETHER
AND, IF SO, HOW TO VOTE ON ALL MATTERS TO PROPERLY COME BEFORE THE MEETING. YOU
MAY, BUT ARE NOT REQUIRED TO, APPOINT ANY PERSON, WHETHER OR NOT AFFILIATED WITH
THE COMPANY, AS YOUR PROXY. IN THE ABSENCE OF A SPECIFIC DESIGNATION, MARTIN S.
BROWN AND HARRY G. BROWNE, M.D., OR EITHER OF THEM, WITH POWER OF SUBSTITUTION,
SHALL ACT AS YOUR PROXY FOR THE ANNUAL MEETING.

Please sign, and when signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.

-----------------------------------
Dated: _________, 1998 Shareholder Name (Please print)

-----------------------------------
Signature of Shareholder

-----------------------------------
Signature if held jointly

[ ] I expect to attend the Annual Meeting [ ] I do not expect to attend the
Annual Meeting

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.